What The Minimum-Wage Sweep Means For US Workers

Flickr / Eino Sierpe
Even in a year when voters went heavily Republican in their selection of elected officials, voters in four generally conservative states opted to support one of President Obama's top economic priorities: higher pay levels for workers at the bottom rung of the wage ladder.

The minimum wage votes mean higher pay for hundreds of thousands of Americans.

Wage-hike advocates say the votes — which affect Alaska, Arkansas,Nebraska, and South Dakota— signal strong public backing nationwide for boosting minimum pay in an economy where inflation has been outpacing pay for many workers.

"This is not a partisan issue for working folks, but a practical one," said Christine Owens, executive director of the National Employment Law Project (NELP), which supported the wage hikes. "People understand that $7.25 is not nearly enough to make ends meet."

The wage hikes in those conservative states not only passed, but did so by wide margins.

In all, some 600,000 low-wage workers in the US stand to get higher pay thanks to the votes, according to an estimate by NELP and the Economic Policy Institute. An additional 1.1 million workers would benefit if governments in Illinois and parts of Wisconsin follow through on advisory votes on the issue this week, the groups estimate.

Higher pay for low-income workers won't, by itself, solve America's economic challenges. The move can make entry-level jobs harder to come by, some academic research finds. And wage gains at the bottom don't necessarily do much for stagnant pay in middle-tier jobs.

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But many economists see the modest raises for low-wages earners as a plus, on balance, not only for those workers but for the wider economy.

The argument that the minimum wage should also be a "living wage" resonated in cities as well as states. Voters in San Francisco and Oakland,Calif., voted to raise their local minimums Tuesday, even though the idea failed in another California city, Eureka.

For the record, someone who earns the federal minimum of $7.25 for 40 hours a week would have enough income to be above the federal poverty line of $11,670 for an individual, but not enough to be above the $15,730 poverty line for supporting a two-person household.

Prior to the election, 23 states had minimum wages above the federal level (sometimes not by much), according to the National Conference of State Legislatures.

Arkansas, Nebraska, and South Dakota will help push that total to 29 US states by next year. (Hawaii, West Virginia, and Maryland also have new minimum wages set to take effect in 2015.

In 2014 alone, minimum-wage hikes have occurred in Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Rhode Island, Vermont, and West Virginia. And the city of Seattle bumped its minimum wage up to a nation-leading $15 an hour. Minimums can rise through ballot votes or legislation, including laws that index the wage to inflation annually.

The ballot votes Tuesday mean the minimum wage will rise to $9.75 in Alaska and to $9 in Nebraska (both in 2016). And it will rise to $8.50 in both South Dakota (by next year) and Arkansas (by 2017).

The minimum in Oakland will be $12.25 next year, and San Francisco will see its rate reach $15 in 2018.

In polls, most Americans say they support President Obama's call for a higher federal minimum wage of $10.10 an hour. A September CBS News/New York Times poll found 70 percent of US adults were in favor of that idea, and 28 percent opposed.

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Many economists embrace the idea, too.

One survey by the University of Chicago last year asked economists about the idea of a more modest hike to $9 an hour. Even though the survey participants were split on whether the move would mean fewer jobs for low-skilled workers, 47 percent said it would be a "desirable policy," because of the pay benefits. Eleven percent thought it would be a bad idea, while 35 percent were uncertain or voiced no opinion.